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Research on fresh agriculture product based on overconfidence of the retailer under options and spot markets dominated

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  • Kai Nie
  • Man Yu

Abstract

In this article, we analyze the application of options contract in special commodity supply chain such as fresh agricultural products. This problem is discussed in the point of the retailer. When spot market and future market are both available, we discuss how the retailer chooses the optimal production. Furthermore, overconfidence is introduced to the supply chain of the fresh agricultural products, which has not happened before. Then,based on the overconfidence of the retailer, we explore how overconfidence affects the supply chain system under different circumstances. At last, we get the conclusion that different overconfidence level has different affection on retailer's optimal ordering quantity and profit.

Suggested Citation

  • Kai Nie & Man Yu, 2013. "Research on fresh agriculture product based on overconfidence of the retailer under options and spot markets dominated," Papers 1312.2203, arXiv.org.
    • Handle: RePEc:arx:papers:1312.2203
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    File URL: http://arxiv.org/pdf/1312.2203
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    References listed on IDEAS

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    1. Yufei Ren & David Croson & Rachel Croson, 2017. "The overconfident newsvendor," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(5), pages 496-506, May.
    2. Augustin Landier & David Thesmar, 2009. "Financial Contracting with Optimistic Entrepreneurs," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 117-150, January.
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    Cited by:

    1. Weihua Liu & Xinran Shen & Di Wang, 2020. "The impacts of dual overconfidence behavior and demand updating on the decisions of port service supply chain: a real case study from China," Annals of Operations Research, Springer, vol. 291(1), pages 565-604, August.

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